Comparative Corporate Governance: An International Review of the Corporate Board of Directors

Abstract:     
The concept of the corporate board of directors dates back to the seventeenth century. The 1694 charter of the Bank of England seems to have coined the term “director” to describe the members of its governing board. The existence of governing bodies, however, was not novel at the time of the Bank of England’s charter. The East India companies used governing boards as early as the beginning of the seventeenth century. Since the seventeenth century, the function of the corporate governance board has remained relatively unchanged, which is, essentially, to monitor (and manage, where appropriate) company operations. The formation of the corporate governance model can vary across different nations, though. Generally, there are two different approaches to establishing and maintaining a corporation’s governing board. Some countries use a two-tier approach, which establishes a management board and a supervisory board. Conversely, other countries adopt the single-tier approach, which establishes only one board. Generally, each approach assigns differently a specific party’s rights and responsibilities owed to (or due from) the corporation.

This comment will compare the differences in the formation and structure of the boards of directors between the unitary and two-tier approaches.

Number of Pages in PDF File: 21

Keywords: comparative, corporate, governance, board of directors, director, governing, board, management, supervisory, supervising, managing, unitary, two-tier

JEL Classification: F2, F20, F22, F23, F29, G3, G30, G32, G34, G38, G39, J00, L00, L2, L20, L22, L29, M00, M1, M10, M14,

working papers series